Dentons has won permission to take its dispute with the SRA over alleged anti-money laundering failings to the Court of Appeal.
The case stems from work for a politically exposed client who was later convicted of embezzlement, and comes amid rising regulatory scrutiny of firms’ AML controls.
Dentons has won permission to take its long-running dispute with the SRA to the Court of Appeal, escalating one of the most closely watched battles between a major law firm and the regulator.
The SRA first brought proceedings against Dentons at the Solicitors Disciplinary Tribunal (SDT) last year, accusing the firm of failing to take proper steps to establish the source of wealth of a politically exposed person (PEP) client between 2013 and 2017.
The firm inherited the client from its combination with Salans in 2013. He could not be named, only being identified as the chairman of a state-owned bank in a non-EEA country who was later convicted of embezzlement and sentenced to 15 years' imprisonment. It was alleged that around $1 billion went missing from the bank while he was in charge.
The SDT dismissed all allegations, agreeing with Dentons’ argument that the SRA’s case relied on money laundering rules that were not in force at the time. The tribunal also told the regulator to shoulder its own £189,000 costs.
Back and forth
The case reignited in March when the High Court overturned the SDT’s decision and ordered the matter to be reheard. As first reported by RollOnFriday, Dentons applied to appeal, and court filings show that on 8 August the application was granted, setting up a showdown at the Court of Appeal.
The case will be closely followed given the SRA’s heightened focus on firms’ anti-money laundering compliance. In March, the regulator fined US firm Simpson Thacher £300,000 over AML control failures, while Clyde & Co was fined a record £500,000 for similar breaches in January last year.
Join 10,000+ City law professionals who start their day with our newsletter.
The essential read for commercially aware lawyers.
